Key takeaways
- Nasdaq drops nearly 1.5% as technology shares weaken
- Tesla cuts spending outlook despite beating earnings expectations
- Dow Jones declines as rising oil prices pressure markets
U.S. stocks opened lower on Thursday, October 22, as disappointing reactions to Tesla and Meta's quarterly earnings interrupted Wall Street's technology-led rally, while another surge in oil prices added pressure.
The Nasdaq Composite fell 1.48% to 26,308.41 at the opening bell, while the S&P 500 declined 0.81% to 7,694.62. The Dow Jones Industrial Average slipped 67.7 points, or 0.13%, to 52,788.41.
The selloff followed Wednesday's gains, when the S&P 500 rose 0.6%, the Nasdaq advanced 1.1% and the Dow added 0.7%
Tesla Stock Slides After $5 Billion Spending Forecast Cut
Tesla shares fell approximately 5% in premarket trading after the electric vehicle manufacturer reduced its planned 2026 capital expenditures from more than $25 billion to approximately $20 billion.
The announcement surprised investors despite Tesla beating quarterly earnings expectations and generating $1.53 billion in free cash flow, compared with expectations for substantial cash consumption.
Tesla delivered 486,532 vehicles during the quarter, while automotive gross margins excluding regulatory credits improved to 18.1%. However, its net income declined 44% from a year earlier.
The spending reduction raises questions about the pace of its AI, robotics and autonomous-driving investments. Tesla had previously outlined an ambitious capital expenditure program tied to those businesses.
Meanwhile, discussions surrounding a potential Tesla–SpaceX merger remain preliminary. The companies have formed committees to explore the proposal, but no transaction has been agreed.
Meta Reports $64.6 Billion Revenue, but AI Costs Remain in Focus
Meta Platforms reported third-quarter revenue of $64.6 billion, representing 26% year-over-year growth and exceeding Wall Street expectations.
However, operating expenses climbed 68% to $51.6 billion, partly reflecting a $9.89 billion legal settlement charge. Reported operating income declined 37% to approximately $13 billion.
According to Meta's earnings release, the company also introduced a new class of nonvoting shares intended to support financing flexibility while preserving existing voting control.
The results follow Coinpaper's pre-earnings analysis, which highlighted Meta's planned $125 billion–$145 billion capital spending program.
Although Meta initially gained after the announcement, its shares weakened in Thursday's premarket session as investors assessed the financial implications.
The latest earnings reinforce the question of who benefits from Big Tech's AI spending, particularly as cloud providers, chipmakers and data centers compete for investment.
Dow Jones Falls as Oil Prices Add to Inflation Concerns
Technology earnings were not the only factor weighing on Wall Street.
Brent crude climbed above $112 per barrel following renewed attacks on Saudi energy infrastructure and shipping routes, increasing concerns about inflation and transportation costs.
The increase follows an earlier oil price surge, when Brent reached a five-month high near $111.75.
The weakness also reverses part of the recent Nasdaq recovery, when AI-related shares rebounded after an earlier selloff.
In contrast to Thursday's opening losses, the previous session's market rally showed how quickly buying can return when earnings exceed expectations.